Summary:

Boeing’s 787 Dreamliner has not hit its development milestones, causing Boeing to take a $2.5 billion charge against earnings.  The key to Boeing’s past success has been its ability to achieve its “big hairy audacious goals or BHAGs” (fromBuilt to Last by Jim Collins and Jerry Porras).

Boeing decided to outsource not only the manufacturing of components but also the design, in order to keep development costs on the 787 Dreamliner low and to please Wall Street investors. By outsourcing, Boeing was able to spread some of the financial risk of the project to its contractors.  While this may have spread the financial risk, it increased the execution risk.

Article Quote:

“Boeing’s problems did not just come from the outside; they were a direct result of actions taken by Boeing.  Talk about the good ideas that you have, but also about the possible unexpected outcomes.  For example, it was a good idea to mitigate the financial risk, but the unexpected outcome was to increase the execution risk.”

Link: http://www.cssp.com/strategicplanning/blog/?p=514

As your company ramps up a significant new development effort, take the time to assess the risks.  Take a look at threats - things that can impact you from the outside.  Also, look for ways to prevent threats or reduce exposure.  What are some early warning signs?  Set up contingency plans and hedge your risk if you can.  These are the traditional risk assessment and mitigation steps.

Boeing may have avoided much wasted time if they had implemented strategic planning technology. Boeing could have developed more advanced communication tools earlier. For example, technology allows you to video conference and share designs so that there is clarity around the issues being discussed – simple emails often do not communicate the full complexity of a specific issue – especially when there were 28 different languages between the various sub-contractors.

For more on strategic planning technology, see http://www.performancesolutionstech.com/category/strategicplanning/